Billionaire Low Sues Sia for Pre-Bayan IPO Defamation

An electronic board at the Indonesia Stock Exchange shows the listing for PT Bayan Resources on the company's first day of trading, in Jakarta. Low has a 51 percent stake in Bayan, which raised 4.83 trillion rupiah ($510 million) in an initial share sale in August 2008. Photographer: Dimas Ardian/Bloomberg

Aug. 7 (Bloomberg) -- Low Tuck Kwong, the founder of
Indonesian coal producer PT Bayan Resources, told a Singapore
court he had been defamed in letters to the regulator and stock
exchange in Jakarta by his former friend Sukamto Sia.

The letters, one month before Bayan’s 2008 initial share
sale, claiming Low reneged on an agreement over the ownership of
the company, were revenge for the freezing of Sia’s assets,
Low’s lawyer said at the start of a scheduled 13-day hearing in
Singapore’s High Court yesterday.

Low is seeking about S$300 million ($242 million) from Sia,
an Indonesia-born investor who claims he gave Low S$3 million in
1995 to set up the coal mining operations. Sia stands by his
claim in the letters to the regulators and the IPO underwriters
that Low promised him half of the business in return, his lawyer
told the court yesterday. Sia countersued for a 50 percent share
of Bayan.

Both Low and Sia, who were in court yesterday, declined to
comment on their dispute.

Low has a 51 percent stake in Bayan, which raised 4.83
trillion rupiah ($510 million) in an initial share sale in
August 2008. Bayan shares rose 0.5 percent to 11,250 rupiah on
the Jakarta stock exchange yesterday, giving it a market value
of 37.5 trillion rupiah. Low holds about $2 billion of publicly
traded assets, including Bayan, according to data compiled and
calculated by Bloomberg.

Gambling Trips

The two men used to go on gambling trips together, Low’s
lawyer Davinder Singh told the court, citing Sia’s submissions.
Their friendship, which began in the 1980s, soured after Sia
failed to pay Low and others HK$240 million ($31 million) in
1997 and Sia was sued and had his assets frozen by a Hong Kong
court, Singh said.

There was never an agreement as claimed by Sia, Singh said.
To allow Bayan’s IPO to go ahead, Low gave up selling 375
million of his shares in the coal producer, losing the
opportunity to use the sale proceeds to reinvest during the
financial crisis precipitated by Lehman Brothers Holdings Inc.’s
collapse, the lawyer said.

Sia denied that Low had suffered a loss due to his letters,
Sia’s lawyer Giam Chin Toon said.

Sia, who was jailed for fraud by a Honolulu court in 2002,
was an “overly savvy and disreputable businessman who has been
imprisoned for bank and bankruptcy fraud and has operated under
different names,” Singh told the court.

“I won’t try and defend that,” Sia said of his fraud
conviction. “What can I say, it’s in the past.”